San Francisco Ballot Measure Proposes to Slow Down Development of Market Rate Housing When Not Enough Affordable Housing Is Being Built

Supervisor Jane Kim introduced a ballot measure on June 17, 2014 that would create hurdles to the development of new market rate housing anytime the ratio of affordable to market rate housing falls below 30%. Supervisor Kim recently proposed a similar effort in the Central City and SOMA through an ordinance introduced to create a Housing Balance Special Use District.

However, this proposed ballot measure would apply citywide. It would apply to new developments of 25 units or more and would require a Planning Commission conditional use permit hearing anytime the City's affordable housing units fall below 30% of the citywide total regardless of whether a conditional use permit hearing would otherwise be required to build such housing.

This ballot measure runs counter to the trend of the past five to eight years to reduce the regulatory costs and time to build housing in order to help housing supply catch up with demand, thus slowing down soaring rental and condominium prices.

Supervisor Kim has stated that she considers maintaining a 30% affordable housing ratio to be a “moderate and reasonable goal,” when compared against the 50% ratio she states that affordable housing advocates have pushed. Developers and other groups disagree, noting that with the loss of the affordable housing funds provided by the former San Francisco Redevelopment Agency, and the reduction in federal subsidies, affordable housing is getting harder and harder to build; and that the ballot measure does not lead to more affordable housing, but instead will slow the production of new market rate housing through added time and cost for approvals. It will also add unpredictability into the process when a project that is code-compliant must nonetheless be justified at a conditional use permit hearing. These factors certainly may contribute to a continuing lag in the supply of new market rate housing.